5 wealth trends shaping luxury real estate in 2020

Highlights from a new market report that explains where luxury is going.

The luxury segment has been an unexpected surprise of 2020. Despite a short dip in April and May, the market bounced back. The median price of luxury single-family homes* has increased by 4.8% since January, and sales volume has doubled since May. Major life changes due to the pandemic are thought to be responsible for a rise in demand for larger single-family homes in locations that can offer more space and greater freedom. This migration of wealth has led to new demographics that are shaping the luxury real estate landscape this year.

For the just-released “A Look at Wealth: New Affluent Trailblazers” (ALAW), the Coldwell Banker Global Luxury® program examines these trends more closely. In a first for us, we compiled analyses by Coldwell Banker Global Luxury Property Specialists and layered in real estate data from The Institute for Luxury Home Marketing, with wealth insights from WealthEngine and Wealth-X, to develop a picture of where wealth is moving in 2020. Here are five highlights from the ALAW report:

1. Intangibles are the new luxuries

Intangibles such as family, health and safety have become higher priorities for the affluent this year while finding a home that better aligns with these priorities also grew in importance.

2. Changing lifestyles spark relocations

The pandemic has sparked major life disruptions for individuals. More of them are teleworking than ever before. They may have children who are distance learning. Some may have decided to retire earlier. With reduced travel schedules and fewer businesses open, they’ve changed their spending habits. In turn, they are looking at new locations and purchasing homes that better accommodate the current needs of their family. In high demand are properties that offer proximity to nature, security and safety, and amenities like pools, home gyms, flex spaces and rec rooms. Financial factors have also motivated some to look at communities with friendlier tax bases or lower costs of living.

3. Real estate’s big role

Luxury real estate professionals find themselves in the center of these lifestyle changes, underscoring the value agents bring to the table now more than ever before. Their local knowledge and connections are intangible luxuries in their own right — especially for clients who depend on their guidance and expertise to make key life decisions for their families. Agents who responded proactively to clients’ shifting needs, quickly adopted new procedures for completing real estate transactions safely, and pivoted to virtual technologies have already proven their worth by saving their clients time, money and anxiety.